Competition Between

IPR & Competition Law

Ashish Chandra

Opening Statement
It is a longstanding topic of debate in economic and legal circles: how to marry the innovation bride and the competition groom
Mario Monti, European Commissioner for Competition Policy, January 2004

Purpose
Competition law:
Concerned with business activities Requires the application of economic theory Prohibit business conducts which harms competitive markets

IPR laws
Concerned with protection the investment of intellect and resources Requires the application of public policy theory To create acceptable monopolies over the intellectual assets
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Purpose
Common purpose to promote innovation
IPR laws: To promote innovation by recognizing and protecting intellectual capital Competition law: To promote innovation by creating environment of healthy competition

IPR laws self sustained code for anti-competition?

Statutory License Compulsory License Fair Use Tariff determination

The objective of above principles is public policy and public interest

Other legislative measures to check anti-Competition

Sector specific regulations eg:
Telecom & Broadcasting: TRAI Medicines: Drug controller of India

Usual restrictions of IPR owners

Refusal to deal Patent pooling & cross licensing (similar to copyright societies) Differential terms of sale of same product Different prices for different territories Closed technological standards Cartelization v. collective bargaining Excessive rights management Tie-in sales Non Compete arrangements

Competition Act
Section 3 Anti-competitive agreements
Exception to IPR owners for:
Retraining any infringement Impose reasonable conditions

Section 4 Abuse of dominant position

IPR creates monopoly Puts IPR owner into a dominant position Trigger point is abuse of dominant position

Important concepts under Competition Law for IPRs

AAEC
Appreciable v. perceptible Adverse v. tolerable

Dominance v. Abuse of dominance Relevant market Essential facilities doctrine Safety Zone for IPR owners

Relevant Market Media, Internet, Tech & Sports

Media:
Television:
Pay TV v. Ad funded TV
DTH / Cable / IPTV / Mobile TV

Over the top internet media consumption

sVOD / adVOD / PPV / P2P

Music
Recording & Distribution Music Publishing Online music market

 Media:

Relevant Market Media, Internet, Tech & Sports

Print Media
Books Journals Periodicals News Papers

Film
Production Distribution Exhibition (on various mediums)

 E-Commerce:
Nature

Relevant Market Media, Internet, Tech & Sports

B2B C2C B2C Social buying v. group buying v. classifieds v. classic e-commerce

Facilitators
Shipments Payments

Placement & listing Keyword Advertisements

 Software:

Relevant Market Media, Internet, Tech & Sports

Operating System Microsoft v. Sun Microsoft Systems, 2004 (EC decision)
PC Mobile Tablets

Middleware
Classic case of Microsoft to open its middleware for third party application developers

Application Software
Industry specific Usage specific

 Sports

Relevant Market Media, Internet, Tech & Sports

Nature of sports Sports association Sponsorships Ticket sales arrangements Sports media rights

Recent CCI orders concerning IPRs

Title BigFlix Microsoft Google India ETC Network Multiplex Assn. Dish TV v Prasar Bharti KBC SAG AG ISAPI v DOT Ratio No dominant position as multiple online movie rental players in the market No abuse of dominance by providing diff price for diff market No abuse of dominance by not providing ad impression and click through information to advertisers No dominant position in the relevant market Cartelization v. Collective Bargaining Refusal to place advt on a public platform of competing services is not anti-competitive KBC is not affecting other shows in the similar genre of GEC channels Complainant failed to prove dominance or abuse of dominance DOT is not an enterprise. DOT exercises sovereign functions which are outside Competition Law

Future issues in tech related anti competition

Standardization of technology network and interoperability Network Access and Net Neutrality Over-regulation? Regulatory convergence in the era of technological / media convergence From ex post to ex ante remedy

My 2 cents.
Commercial Dispute v. Anti-competition A mere dominance is not anti-competitive A generic abuse of dominance is not sufficient:
Abuse should lead to AAEC AAEC should impact relevant market

For public policy issues take shelter of legal tools in IPR laws use competition law if there are business issues Expert opinion is a must have to identify dominance, its abuse & its impact Competition law is a specialized field of law

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